Comet is the second largest electrical retailer in the
Comet offers a wide range of electrical products - all at ‘Every Day Low Prices’ - on average, 34,000 competitor prices are checked every week to ensure that Comet’s prices cannot be beaten.
Company Background:
• Market position is No.2 in the
• Over 250 stores (comprising 175 core stores, 76 destination stores, 7 two-storey stores)
• 2,793,644 sq ft of trading space
• 10,000 employees
Results Sales £m - Retail Profit £m (Source: www.comet.co.uk)
| Year | 2000/01 | 2001/02 | 2002/03 | 2003/04 | 2004/05 | 2005/06 |
| Sales £m | 1,205.8 | 1,335.6 | 1,406.1 | 1,444.4 | 1,538.1 | 1,530 |
| Retail Profit £m | 33.1 | 38.4 | 43.3 | 47.4 | 52.0 | 38.0 |
Retail Profit
Sales Profit
After Sales Service
• 19 service centers
• 700 engineers
• nearly 1 million jobs completed annually
Home Delivery
• 15 Home delivery platforms
• Approx. 1,000 employees
• 1.3 million deliveries completed annually
Main Functions of the proposed system: for a single medium sized Store
Proposed System: Based on a RFID enabled information system with a combination of various mobile technologies.
Aim: To create a software infrastructure that integrates business logic and processes with a variety of automatic data collection and sensor technologies, including RFID, mobile devices, location tracking systems and feedback mechanisms.
1) Improved in store customer experience by RFID Advertising & product Tagging. (Makes shopping experience easier and more fun) (Rapid checkout)
2) Improved Tracking of Goods in warehouses & home deliveries. (Location Information System)
3) Improved Security – for the products in store & during home deliveries.
What is RFID - Radio Frequency Identification, or RFID, is a technology that uses radio frequency communication to automatically identify, track and manage objects, people or animals. It works by using two or more devices - a reader and tag. The devices are paired and able to "recognize" each other through the transmission of radio waves.
How RFID Works - The tag or transponder, which contains an electronic circuit (transponder), is attached to the object that requires a unique identification code. When the tag comes near the reader, the radio frequency (RF) field generated by the reader will power up the tag and cause it to continuously transmit its data by 'pulsing' the radio frequency. The data is then captured by the reader and processed in the back-end by applications like the Enterprise Resource Planning (ERP) or Supply Chain Management systems.
Benefits of the proposed system (to Comet or to its users/customers)
This powerful infrastructure enables the creation of intelligent sensor networks. By using RFID, sensors are able to work together as an intelligent network by combining, organizing and coordinating these technologies through a common management structure, advanced feature set and event-driven development framework.
Advantages of using RFID Technology
Both the reader and tag can be sized and shaped in different ways. Due to the small size of the tag, it allows great freedom of movement and there is no need for direct contact for both devices. This results in a high level of convenience and flexibility for the user company (Comet). Some of the other advantages of RFID are summarized below:
- Tags can be hidden or embedded in most materials
- Different shapes and sizes, users can decide the most suitable for their needs
- No line of sight required
- No wear and tear due to its contact less nature
- Tags can be read even if covered with dirt or submerged
- Unalterable permanent serial code prevents tampering
RFID will also help consumers avoid the dreaded long checkout lines, or the search for a staffed cash register, with self-service checkout. And unlike bar coding, which requires each item to be swiped over a reader; RFID receivers can instantly total the contents of a cart or shopping bag and charge the customer's account. A privacy system that deactivates the RFID chip when the customer leaves the store was also on display.
An RFID system can track and trace the products and other reusable equipment used in the transportation of the goods, as well as the goods themselves. This is highly significant for distribution /logistics companies with container inventories of several million pounds, who need to ensure that their products are returned regularly. If 10 per cent of goods are lost in a year due to poor or non-existent traceability by a distributor with £10 million worth of reusable containers, an RFID system could pay for itself in months on this basis alone. RFID has been proven to be more efficient than barcode systems in terms of read failure rates, even though the speed of read is many times faster. RFID is also less prone to human errors. Since Comet retails expensive goods like television, audio visual equipment, computers, and other expensive electronics. This new system will bring significant benefit to the company.
An RFID tag can work just like a barcode – it can hold a unique article number which works like a “license plate”, calling the information relating to that number from a separate database. But because it can contain a relatively large amount of digital data, the RFID tag can hold source information itself, as opposed to a mere “look-up” number, thus making it infinitely more useful for product tracking and many other applications.
Similar projects within the same industry and their use of mobile technologies
Where is RFID being used currently?
There are applications today throughout the supply chain, in:
- Manufacturing
- Distribution
- Retail
- Consumer applications
There are many current examples of RFID in manufacturing and distribution and retail is a hot trend - with Wal-Mart and Gillette (in the
Wal-Mart Stores continues to expand its RFID capability to additional facilities, enabling an additional 400 Wal-Mart stores by the end of 2007. Through RFID technology, Wal-Mart is providing value to customers, working with suppliers to deliver collaborative benefits that allow people to save money and lead better lives.
Wal-Mart’s focus on using RFID to improve in-stocks for the customers means eliminating extra trips they may make to the store, or to other stores. Customers will be able to enjoy advantages such as automatic warranty activation on electronics, freshness assurance on foods thanks to cold chain monitoring and enhanced product safety as a result of faster, more accurate recalls and better freshness monitoring.
Wal-Mart plans to reduce any unnecessary truck deliveries and even frequent trips of customers to their stores by keeping their stocks up to date. Twenty four million customers visit their stores everyday and even if around 100,000 unnecessary trips are avoided by keeping the stocks up to date a lot of pollution in the air could be avoided by bringing down the emission rates.
The retailer is even looking to use RFID for reducing waste stream for electronic goods and the company is a part of the group looking for grant with the Environmental Protection Agency so that RFID could be used for benefiting the environment around us.
Technologies recommended to the client (Comet) and their justification
Store Replenishment and Ordering
Each item of stock will have an RFID tag attached at the point of manufacture. These will enable the Comet store to check its inventory levels quickly and effectively. The item-level tags will be able to see discrepancies between the items on the shelves and the store inventory. These could then be noted and reported.
After checking inventory levels in store, the system will also generate an order and check it against the supply chain for any likely problems.
POS (Point Of Sale) Checkout Process
Traditionally, all checkouts use barcode scanning. For example, if a consumer buys new Mp3 Player, the shop assistant currently would scan the first item and then uses the quantity key to multiply that scan, instead of scanning each item individually. As a result, the retailer can't collect accurate pricing information or details such as the type or color of the mp3 sold. To address these issues, I am advising Comet to upgrade its checkout process to include RFID scanning of all products at the POS. This will enable the store to implement an end-to-end automated inventory process. The proposed system will independently recognize each product sold at the register using RFID for inventory and the barcode for sales. In addition, goods will be scanned at the POS with no human intervention as they pass within a certain distance of a reader. This makes the checkout process faster for the customer and more efficient for the retailer, who can deploy employees to other, more customer-facing activities.
Theft
Comet is also planning a system to deactivate the tags as products leave the store. The devices that will disable tags can also potentially be used to determine whether items have been scanned at the POS before they leave the store. In doing so, these will help stores to detect shoplifters.
Find Merchandise in the Store
Comet could also use item-level tags to quickly locate items in the store, thereby increasing operational efficiency and service for the customer. Phone calls and wasted visits to the stock room will no longer be necessary.
Customer Loyalty
Comet caters to an exclusive clientele of electronic enthusiasts and aficionados. As an ultimate goal, it would like to give each customer a store card with an embedded RFID tag. Customers who agree to have such a card could be scanned as they enter the store. Those who prefer not to be identified would have a privacy flag next to their details on the database. In this case, nothing would disturb the customer while shopping.
By tagging loyalty cards, Comet could potentially harness information on customer shopping history to offer willing customers personalized offers in store. To enable this, a shop assistant would have to review customer data once they are identified by the system. The employee could then approach the customer and offer items that may be of interest. Eventually, this process could be fully automated, with offers and promotions made to customers' phones or PDAs, through mobile devices mounted on shopping carts or through kiosks.
Item level tagging will mean that each mp3 player that is sold will eventually have a tag containing the date of sale, service plan. This would enable the retailer to effectively manage warrantee agreements and identification of products in the event of theft.
RFID Software Management solution – RFID Anywhere by Sybase iAnywhere
RFID Anywhere is a flexible software infrastructure that integrates business logic and processes with a variety of automatic data collection and sensor technologies, including RFID, barcodes, mobile devices, location tracking systems and feedback mechanisms. This powerful infrastructure enables the creation of intelligent sensor networks. By using RFID Anywhere, sensors are able to work together as an intelligent network by combining, organizing and coordinating these technologies through a common management structure, advanced feature set and event-driven development framework.
RFID Anywhere simplifies the development, deployment, configuration and management tasks for highly distributed, multi-site, intelligent sensor networks, and abstracts the interaction with the physical network of devices. By exposing the raw data from sensors in an event-driven architecture and providing a powerful service-oriented architecture layer, developers and integrators can focus on writing business logic, not low-level hardware interfaces.
RFID Anywhere supports a broad array of hardware, standards and development models and can be deployed to the edge of the network, reducing the flow of data across the network and enabling real-time reactions to important RFID, location and sensor events.
Source: http://www.ianywhere.com/products/rfid_anywhere.html
Types of RFID Tags
Partners and Technology components that will be needed to create the proposed system
- An RFID system consists of tags (transponders), antennas and transceivers (transmitter/receivers)
- Tags (transponders) consist of a coil of wire plus a silicon chip and a battery
- Tags can be as small as a pill, shaped like a credit card or woven into a label
- Antennas can be built into doorways, hand held scanners or checkout areas
- When the tag is placed near the energized antenna (2 cm – 30 m depending on type of tag and frequency) a small amount of current flows in the coil within the tag enabling simple commands to be executed by the chip. This might be as simple as revealing a predefined ID which can be read by the antenna or the storage and retrieval of data
- Some tags have their own power source (active tags) which increases the range over which they can operate
- In some applications multiple tags can be read at the same time or while the tag or reader are moving tags can be read-only or read/write
- RFID tags are becoming cheaper as they become more common with tags costing a few pence each in the
- In the future parts of tags may be printed with magnetic ink
- Source: [www.jonathanbriggs.com]
Partners – The entire system will be based & run on a Software RFID solution known as “RFID Anywhere” provided by a company known as Sybase iAnywhere. It has an Office in the
Source:http://www.ianywhere.com/products/rfid_anywhere.html
The Supplier for the RFID Hardware, from which the system will be built –A 2nd Partner based in the
http://www.agilitysystems.co.uk/rfid.htm, http://www.agilitysystems.co.uk/hardware.htm
Estimation of the construction and running costs for the system
Cost - Cost is a major factor hampering the widespread use of RFID tags. An RFID will always be more expensive than barcodes. Comet has to make sure that the value of the RFID tag is less than the profit margin of the product itself. However substantial productivity gains can be made both in accuracy and the elimination of re-labeling costs and effort. Comet can expect to spend around £100,000 - £150,000 on RFID implementation costs per store.
Some of the common external costs a comet can expect:
Description Total
* One Thermal RFID Printer/encoder £5,000
* Two Door Read Points - includes
* 3 x EPC compliant, multi-protocol readers
* 8 x Bi-static 915MHz Antennas
* 4 x Industrial Strength Enclosure for Dock Doors
* Cables, UPS, Lights, Mounting Hardware.
Components: £15,000
Hardware Total: £20,000
* RFID Middleware: £30,000
* External Services: £50,000
Total: £100,000
Tags and readers are the main components of an RFID system. Passive tags are cheaper than active tags As for consumables, the 4 inch by 6 inch RFID Labels tend to cost around £0.40 a piece for quantities of 100,000 or less. Thermal printer ribbons are most likely part of the current budget. However this implementation probably is not nearly as complex or expensive as a full integrated implementation of RFID into a company's supply chain. These implementation costs are significantly higher and it is implemented slowly during a longer period of time and will slowly replace the existing technologies.
Other Costs
Comet will need to hire a systems integrator to install the readers, determine the right placement of tags for products and make sure that they are feeding data to the middleware in the right format. RFID systems can be tricky to install in a way that provides accurate reads because many factors affect the ability to read a tag, including the placement of the tag, placement of antennas and type of antennas. Companies will also need to invest in training for their employees, particularly engineering staff who will manage readers in manufacturing and warehouse facilities, and IT staff who will work on the systems that manage RFID data.
The costs can be significant, particularly at this stage when the industry is very immature.
As the technology improves and is more widely adopted, costs will come down and the technology will be easier to install.
Revenue or Savings that might be derived from the proposal
Attracting Shoppers via RFID Advertising
User targeted ads - While shopping around in one of the Comet stores, you might get a message on your cell phone that there is a discount or a sale on a specific electronic item and if you happen to pass through the showroom the stakes might be raised in order to make it a tempting offer for you. Shoppers at Comet would get to know about the various offers at the shop through a combination of RFID tags, infrared and wireless transmitters. One could get the information either through a rented reader or on their cell phone.
RFID Business Benefits - Use of RFID technology can increase business productivity and reduce associated costs. To ensure that comet benefits from the advantages RFID provides it is important to understand how to adopt this technology.
Improved Productivity and Cost Avoidance - Identifying items by RFID involves less work than using barcode scanning and other less automated ways. This leads to greater process effectiveness in many tasks such as receiving and putting away, picking and delivering goods when the time required and cost of identifying items by RFID is substantially less than other methods.
Decreased Cycle Time and Taking Costs Out - RFID scanning is not a serial process, like traditional Barcode scanning, so the employees of Comet can perform identical tasks much more quickly. This means processes that move goods through a supply chain are more efficient, leading to a reduction in the need for larger inventories.
Reduced Rework - As RFID scanning has a greater first time pass accuracy, this reduces the number of errors that are generated, and the number of retries that are needed.
Reduced Business Risk and Control of Products - RFID tagging enables better audit and product control. The ability to better track and trace items means the products in-store can be located more easily. The opportunity for enhanced data collection leads to increased accuracy of record keeping and improved product maintenance.
Improved Security and Service - Being able to validate information relating to an item enables increased security. This individual identification contributes to more effective access control, reductions in shrinkage and other losses, and the ability to provide fast and efficient services at the point of need. Ability to authenticate information can prevent activities like counterfeiting and fraud.
Improved Utilization of Resources - Information obtained by RFID scanning can be used to improve planning. Processes can be improved, time can be saved, and assets can be utilized better.
Increased Revenues - By eliminating uncertainty, Comet will suffer less "out of stock" situations and obtain greater item availability. This will reduce lost sales and increase choice, leading to more sales.
Security, Privacy or Ethical issues arising from the system
RFID technology is being used to provide critical additional security for goods and containers in transit - and is becoming a requirement for efficient and secure imports. Tags can provide evidence when and where goods or containers have been accessed and can initiate alerts when pre set criteria are breached. For this reason, a RFID tag is used for management of goods and its circulation, and it is used as a substitute of a bar code. However, RFID tags are too limited in their capabilities to implement complex authentication and cryptosystem. Thus, since the information on a tag is simply drawn out by the reader, RFID tags may infringe on a possessor's privacy. And RFID tags leak its possessor's location called "location privacy" by attackers extracting data from RFID tags. However, the powerful tracing ability of a RFID tag infringes the consumer privacy. Thus, it is possible to trace a specific RFID tag by tracing specific information even if ID of a RFID tag is encrypted. It infringes on the privacy about the location of the owner of a RFID tag. Therefore, in order to solve this problem, it is necessary to change ID information periodically.
Key Issues for Consumers
The situation is of concern to privacy pressure groups because:
- RFID can be read through materials, items, or packaging, so consumers can never be sure when a tag is present or being scanned.
- RFID can be read at a small distance with no overt physical action required to scan the tag.
- Data collected from RFID tags can potentially be held by multiple parties, including Internet-accessible databases, causing security concerns.
- Tags can potentially remain active outside of the store environment.
To ensure that customers' concerns are addressed, retailers and other organizations must undertake initiatives to educate the public on the realities and myths of RFID. Increasingly, such initiatives will demonstrate that RFID is designed to track products and physical assets rather than people.
The kind of passive tags that will be deployed for most retail applications, for example, are only readable from a few meters, ensuring that customers cannot be tracked once they exit the store.
Tags can also be disabled as they leave the store, or placed inside labels that customers can remove from products once they have purchased them.
In addition, it is imperative that all customer-facing RFID-enabled solutions are optional. That means customers must always give their permission before data about them is used.
References:
[1] Module Guide / Reference
http://www.jonathanbriggs.com/
[2] Client Website
http://www.comet.co.uk/
[3] Competitor using similar technology (
http://www.walmartfacts.com/
http://en.wikipedia.org/wiki/RFID
[5] Wikipedia - The Free Encyclopedia
http://en.wikipedia.org/wiki/Bluetooth
[6] Wikipedia - The Free Encyclopedia
http://en.wikipedia.org/wiki/Cell_phones
[7] RFID: spy chips or useful devices? [www.JonathanBriggs.com]
http://www.jonathanbriggs.com/courses/mobilebusiness07/spychips-rfid,583,BA.html
[8] A web log containing the Latest Developments/News on RFID
http://www.rfid-weblog.com/
[9] A list of Existing RFID Technologies/Applications already in use
http://www.rfidexchange.com/applications.aspx
[10] A brief Presentation on RFID
http://www.rfidexchange.com/DynamicPowerPoint.aspx
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